New Jersey Has the Highest Electricity Rates in the US — And a Deregulated Market to Fix That

New Jersey Has the Highest Electricity Rates in the US — A Deregulated Market Can Fix That

New Jersey residents face some of the highest electricity rates in the continental United States. Customers of PSE&G, JCP&L, Atlantic City Electric, and Rockland Electric pay significantly more per kilowatt-hour than the national average. But the good news is that New Jersey also has a fully deregulated electricity market — meaning you can shop for a better supply rate from a licensed Third-Party Supplier (TPS) without changing your utility.

Why NJ Has the Highest Electricity Rates in the Region

New Jersey’s highest electricity rates are the result of several factors: aging grid infrastructure, high demand density, and a regulatory environment that historically prioritized reliability investment over consumer price competition. The state’s “Basic Generation Service” (BGS) rate — set by each utility — is often significantly higher than competitive TPS offers.

For PSE&G customers in northern NJ and JCP&L customers in central NJ, BGS rates can run $0.12–$0.18 per kWh for electricity supply alone. On a typical 750 kWh monthly usage, that’s $90–$135 just for supply before delivery charges. With some of the highest electricity rates in the region, NJ households are leaving serious money on the table by staying on BGS.

How to Lower Your Bills Despite NJ’s Highest Electricity Rates

New Jersey’s electricity deregulation (enacted in 1999) allows any residential or commercial customer to choose a Third-Party Supplier for electricity and/or natural gas supply. Your utility still delivers electricity — handling outages, meter reading, and billing — but the supply portion of your bill can come from a competitive TPS at a lower, fixed rate.

Step-by-Step: How to Switch in New Jersey

1. Find your current BGS rate: Look at your most recent utility bill and find the “supply” or “generation” line items listed in cents per kWh.
2. Compare TPS offers: Use MyUtilitySearch to compare available Third-Party Suppliers in your NJ utility territory. Enter your zip code to see all licensed suppliers.
3. Choose a fixed-rate plan: Fixed rates protect against seasonal spikes. Despite having some of the highest electricity rates in the nation, New Jersey’s TPS market offers competitive fixed-rate options.
4. Switch: Contact your chosen supplier or switch online. Your utility handles the transition with no service interruption.

Savings Potential in New Jersey

Even with some of the highest electricity rates in the US, switching to a TPS can generate significant savings:

• PSE&G territory (northern NJ): Switching from BGS can save $200–$500+ per year for typical households.
• JCP&L territory (central NJ): Similar savings available, especially with multi-year fixed-rate contracts.
• Atlantic City Electric (southern NJ): Competitive suppliers available; savings depend on current BGS rates.
• Natural gas: NJ gas is also shoppable — adding gas TPS savings can push annual savings past $600/year.

Consumer Protections for NJ Electricity Shoppers

New Jersey offers strong consumer protections despite its highest electricity rates environment:

• All TPS rates and terms must be disclosed in writing before signup
• 3-business-day cancellation period (rescission right)
• 30-day advance notice before any rate increase
• Right to return to BGS at any time without penalty on month-to-month plans

Frequently Asked Questions

Will my service be interrupted if I switch suppliers?

No. Your utility (PSE&G, JCP&L, ACE) continues to deliver electricity and handle outages. Switching only affects who charges you for supply.

Are variable-rate TPS plans safe in NJ?

Variable-rate plans can spike significantly. Despite having the highest electricity rates already, NJ variable TPS plans can go even higher in peak periods. We recommend fixed-rate plans.

Start Saving on New Jersey’s Highest Electricity Rates Today

New Jersey may have some of the highest electricity rates in the US — but you have a legal right to shop for better rates. Most NJ households can save $200–$500+ per year on electricity alone, and more with gas and internet savings combined.

For more information on New Jersey’s deregulation, visit the New Jersey Board of Public Utilities.